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11. Using a figure describing both the U.S. money market and the foreign exchange market, analyze the short-run effects of a decrease in domestic real
11.Using a figure describing both the U.S. money market and the foreign exchange market, analyze the short-run effects of a decrease in domestic real GNP on the dollar/euro exchange rate. Clearly illustrate in the graph (correctly labeling axes and curves) and explain briefly what causes the curves to shift. What happens to the value of the dollar?
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